Olmito agriquatic investor presentation deck 2

Olmito

A Shift in the Paradigm

Wastewater Treatment Protein Production

CO2 Mitigation

Three Universal Problems

1. Availability of Potable Water

“It’s all used up!”

2. Cost of Wastewater Treatment “They keep tightening the screws!”

3. Everyone is BROKE

”20th Century revenue model in a 21st Century world!”

One Solution

“ . . . .treating wastewater toa fully recyclable condition . . . and, making excellent profits intothe bargain . . . “

Shifts The Paradigm

Wastewater Treatment

The “process” itself makes a net profit and treated water is fully recyclable . . . even as potable water

Production of Protein

Duckweed produces 30 times as much – of a better protein - as soy beans on the same footprint.

Mitigation of CO2

Agriquatics duckweed consumes 3 times as much CO2

as does the same footprint of Amazon rainforest.

A Thumbnail Definition

The System

Treatment of Municipal and CAFO (concentrated animal

feeding operations) Wastewater to a completely recyclable (potable) condition by means of a proprietary, integrated system which incorporates:

Swirled and Laminar Flow means by which to separate raw influent solids and liquids;

Sonic and Mechanically Assisted Cell Lysis to aid solids breakdown

Phased-Sequenced Anaerobic Digestion and/or

Vermiculture-assisted reduction of the solids fraction;

Duckweed-Based Nutrient Removal from the liquid fraction; and

Integrated Extraction of Value from the resulting duckweeds and worms through aquaculture, extraction or other value-adding subsystems.

The Agriquatics System

Raw Influent

Pre-Treatment Solids/Liquids Separation

Anaerobic Digestion

Aquaculture

Nutrient & CO2 RemovalFiltering & Disinfection

Energy

Fish & Prawns

Pure

Water

$

$

$

Duckweeds

Agriquatics Municipal Wastewater Treatment System Flow Diagram

Grit & LargeSolids Removal Flow splitter

Laminar flowsolids separationarray

Hydrocyclonearray

Lemna Treatment Bioreactors remove nutrients & polish for toxins

Lemna Bioreactors

Finished waterstorage

Finishedwater filtration& disinfection

Clarified flow returned to head of system

Recycled

fully treatedflow

Raw M

unicipal Wastew

ater

Clarified water

Min

eral

s

Dis

pose

d

Phased Sequenced Digester Array

Elec

tric

ity

& H

eat

Nutrients

Aquaculture of Tilapia

Vermiculture System Drying & feed production

O2 and Disinfection

FishFeed

Treated water

Tilapia

Fish to

Marke

t

The Agriquatics Core: The Duckweed Bioreactor

The Lemna Gibba “mat” The “ball valve”

Harvesting with ball valve removed Harvested duckweed

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Spirodella polyrhiza – so called “giant duckweed”

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Spirodella polyrhiza mat

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Wolffia arrhiza – the worlds smallest flowering plant

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Wolffia arrhiza – flowering and seeding

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Wolffia arrhiza mat

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Lemna minor – so-called “common duckweed”

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Lemna minor mat

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Lemna gibba mat – our Barranca “crop”

The Agriquatics Engine: The Lemnaceae family “ . . . duckweed are the world’s fastest growing plants . . . “

Harvested Lemna gibba in Barranca “Parque Ecologico”

We’ve “farmed” duckweed on wastewater worldwide

Hookerton, NC WWT Plant Ayotlan, Jalisco WWT Plant

Ferrenafe, Peru WWT Plant Las Animas, Colorado WWT Plant

Kumudini Complex WWT Plant in Mirzapur, Bangladesh

Parque Ecologico WWT Plant in Santa Catalina, Barranca, Peru

The Agriquatics Cashbox: Intensive Aquaculture “ . . . the only aquaculture system now removing 100% of nitrogen (ammonia, nitrate and nitrite) & phosphorus from recirculating fish media . . . “

“ . . . the only aquaculture system now capturing 100% of the system wastes – including slaughtered fish wastes – leveraging it with photosynthesis, and feedingIt back to the fish . . The lowest cost intensive aquaculture system in the world . . . “

Water Reuse Domed Aquaculture

Tilapia

Barramundi

Arapaima /Paiche

IQF Fillets

Fresh Fillets

The unique dodecahedron dome and concentric ring structureallows “natural” air conditioning, aquaponics and continuous progression and harvesting of fish.

The Olmito Water Supply Corporation

Local Partner and Project Host• Located in the northern suburbs of Brownsville, Texas• Serves a population of around 2,000 households• Equipped to provide 2 MGD of potable water• Permitted to treat 0.75 MGD of wastewater

• 2012 Budget:• Expenditures $1.7 million• Debt Service $200K• Revenues $1.85 million• Net Revenues $150K

• Lending Institutions:• USDA• Texas Department of Transportation• Texas Water Development Board• Private Banks

The Olmito Water Supply Corporation

Commitment to Olmito Agriquatics• Wastewater – All existing and future flows in service area• Lagoons – 40 acres of existing lagoons• Land – 60 acres of adjacent land• Permit – Initial startup permit to treat 0.75 MGD• Debt Guarantees – Up to $7 million in service revenue guarantees• Grant receiving context – 501(c) 3

• Expansion Context:• Context for treating flows of neighboring jurisdictions:

• Los Fresnos – 2+ MGD• Brownsville – 4+ MGD• Rancho Viejo – 0.6 MGD• Internal Service expansion: 0.5 MGD

• Management and Personnel Assistance:• Board of Director Members• Management Assistance• Personnel Assistance

• Active Relationship with Lending Institutions:• USDA• Texas Department of Transportation• Texas Water Development Board• Private Banks

Looking across Olmito Lagoon #1

Looking down the divide between Olmito Lagoons #1 and #2

The Olmito Constructed WetlandPolishing Zone

Olmito treated discharge

Looking across the AgriquaticsZone

The Olmito Agriquatics ProjectA Thumbnail Business Plan

Agriquatics Olmito, LLC Corporate Structure

Agriquatic, LLC OWSC

Olmito Agriquatics, LLC

Investor 1(no “B” to “A” conversion)

Investor 3( Yr 5 “B” to “A”

conversion)

NadBank

USDA/TWDB

PrivateBanks

Olmito Households

50% “A” Stock

& D

ividends

$100K Cash, Technol. &

managem

ent

47% Stock

& D

ividends

$100K Cash, Land & Loan G

uarantees

22% Preferred “B”

plus 100% payback

$1 million cash

“B” plus payback

$100K Investment

payback + 3% “A”

$200K in

vestm

ent

Debt service

$1.9 million LOC

Debt service

$4.0 m. term loan

Debt se

rvice

$4.38 m. te

rm lo

an

Enhanced Services

Reduced Tariffs

Investor 2(no “B” to “A” conversion)

• Agriquatics LLC – $1.09 million in Yr5 for a total of: $1.09 million

• OWSC – $1.024 million in Yr5 for a total of: $1.024 million

• Investor 1 ($1.0 m) – $0.22 million in Yr5 for a total of $1.22 million

• Investor 2 ($0.1 m) – $0.022 million in Yr5 for a total of $0.122 million

• Investor 3 ($0.2 m) – $0.065 million in Yr5 for a total of $0.265 million

• Olmito Households – $1.9 million in fees paid to OWSC, and $1.09

million in existing debt retired with AO dividends.

• NadBank – $0.67 million in debt service payments in Yr5

• USDA/TWDB – $0.59 million in debt service payments in Yr5.

Agriquatics Olmito: End of Yr5 Consequences to “Players”

The Olmito Agriquatics ProjectA Brief Time Line

2012 • Cash investment committed• Pre-engineering & Project Planning• TCEQ engaged• Banks & Financial Institutions engaged & lending in place• Commence engineering

2013 • Engineering Plans completed• Environmental Assessments completed• Provisional Permits in place • Commence construction• Begin treatment on project “front end.”

2014 • Finish core system construction• Build up to full treatment of wastewater and production of fish• Continue Landscaping and Park construction

The Olmito Agriquatics ProjectAn Offer to Investors

The Investor Provides:

• A Cash Investment of $1.3 million in 2012

The Investor Receives:

• A “First-In-First-Out” commitment on Pay-Back(Estimated completion of pay-back by 2015)

• Convertible “B” Preferred Units (shares) paying 22%(Conversion option through 2017 for 20% of Company)

• 1 Seat on a 5-Man Board of Directors

• First-Right-of-Refusal for Subsequent Projects

The Olmito Agriquatics ProjectThe Core Agriquatics Team

Paul Skillicorn• Technology developer – Engineer, Economist, Manager• Agriquatics CEO• 35 years duckweed and aquaculture experience• 35 years management and development experience throughout

Victor Treviño • Harvard MPA – Management & Public Administration• Olmito General Manager• 25 years municipal management water company management

Charles Taylor • Economist – Agricultural Economist – Rural Development Expert• Kenaf Industries CEO • Plastics and agribusiness extensions

Stan Harmon• Class Three WWT Operator• Advanced Aquaculture Expert• Landscape Designer / Artist

The Olmito Agriquatics ProjectNext Steps

Investor Commitment

Formal Joint Venture Agreement among Parties

Create Olmito Agriquatics, LLC – Setup Operations

Pre-Engineering and Project “Articulation”

Lobby / Negotiate with Financing Institutions • USDA Rural Development • Texas Water Development Board• NadBank / BECC• EPA

Engage TCEQ (Cognizant Texas Regulatory Authority)

Commence Working on Engineering and Environmental Assessment

The Olmito Agriquatics ProjectThe Value Proposition

Wastewater treatment moves from major liability to a strong profit center

Protein production moves to another dimension with respect to both quality and productivity

Fish production efficiencies approach those of poultry with respect to both conversion efficiencies and total costs

Wastewater is treated to a fully potable condition -- bringing “recycle value” to its maximum potential

With “Water in Hand” on the periphery of a major metropolis – real estate capital gains are maximized

The Olmito Agriquatics ProjectKiller Comparative Advantages in Wastewater Treatment

Profit-making operations – first WWT system in the world to do so

Treatment to a much higher quality standard – potable water output

More forgiving system – 10 to 15 day hydraulic buffer – no “surprises”

Attractive, odor-free treatment facilities – Can be “modularized,” distributed and phrased as parks to meet “greenspace” commitments throughout the city

Distributed treatment -- Means less investment in mains and lift stations

Inexpensive systems – Can be amortized in 5 years and “moved” – again and again – ensuring value-retention in real estate (massive potential capital gains)

Environmentally superior – Treatment uses minimal electricity. Duckweed consumes 3 times as much net CO2 as the Amazon rainforest.

The Olmito Agriquatics ProjectKiller Comparative Advantages in Water Supply

A completely new source of water for every municipality – Enough water, with 100% reuse, to quadruple existing supplies.

A new source of water that is already distributed throughout the larger urban area – minimal requirements for massively expensive mains, pumps and pumping

A new source of water that requires no treatment – provided directly to the municipality in a potable water condition, the new water supply obviates the need for massively expensive water treatment plants.

A new source of water that keeps coming back – allowing seemingly “indulgent water use” without cost to the environment, cost to the city or applying stress on existing available resources.

The Olmito Agriquatics ProjectKiller Comparative Advantages in Aquaculture

Complete removal of nitrogen & phosphorus in a recirculating aquaculture system – resulting in significantly higher production efficiencies and zero discharge of water at the “end of a cycle.”

Complete recovery and reuse of all uneaten feed and fish/prawn wastes, plus a photosynthetic “boost” – results in dramatically lower feed costs and higher production efficiencies.

Complete recovery and reuse of all fish processing wastes – gut, skin, head and fin recovery and reuse results in significantly lower feed costs and higher production efficiencies.

System design allows continuous output on batch inputs, with higher and more consistent product quality – resulting in lower processing costs and higher returns per lb of fish delivered to the market place.

The Olmito Agriquatics Project

Note: The only product assumed to be manufactured in this scenario is the “Milled to <10 microns” duckweed powder. AllOther products may, however, be produced under differing, feasible scenarios.

Key Parameter Values & Assumptions

The Olmito Agriquatics Project

Key Parameter Values & Assumptions

The Olmito Agriquatics ProjectKey Parameter Values & Assumptions

The Olmito Agriquatics Project

Questions?